Users of smartphones and other similar devices are conducting an increasing number of electronic transactions. While financial transactions with merchants have become much more user-friendly and commonplace, users are additionally employing their devices to conduct transactions with other mobile device users. These peer-to-peer (“P2P”) transactions allow a user and a counter-party to conduct electronic transactions exclusive of a traditional credit card system or other related system. In addition, some small businesses and other merchants will accept a P2P transaction.
Conventional P2P transactions include some risk to the payment recipient, as the payment may not be completed if the payor does not have a funded account, cancels the transaction, has a fraudulent account, or for any other reason does not complete the transaction. A peer-to-peer transaction contains more of a risk than receiving cash from a payor, but may contain similar risks to receiving a check or a credit card payment.
The recipient must trust that a P2P transaction will be conducted, but must also trust that the transaction will be completed in a timely manner. The recipient wants a payment that will be received quickly after the transaction is initiated.
Credit card companies and other financial institutions employ various means of accessing the riskiness of a transaction with a payor. For example, a payor may have a credit rating that is generated from the collected payment history and other factors from the payor's financial history. The credit rating is generally only available to merchants or institutions to which the payor gives authorization. The credit rating assesses a risk history for the payor and does not assess risk for a particular transaction.
Users of P2P payment technology are desirous of a simpler and faster method of determining if a payment from the payor will be successfully completed. An example of a circumstance in which users may conduct this type of P2P transaction might be when two people dine together at a restaurant. If a user pays the restaurant for the bill, the other member of the party may desire to pay his share of the bill to the user. If the user is familiar with the payor, then the user may feel comfortable accepting the payment from the payor and that the transaction will be completed. However, if a third person with which the user is not familiar attends the meal, the user may desire to know if the transaction is likely to be successful before accepting a P2P payment. Conventional technologies do not provide this information.
In another example, a user may desire to sell an item to a payor, such as at a flea market or on an Internet commerce site such as CRAIGSLIST. In this environment, the user typically does not know the payor and would not have a manner of assessing the riskiness of conducting the transaction with a P2P payment. The user would like to know that a transaction has a high likelihood of being completed before giving the purchased item to the payor. Conventional technologies do not provide this information.